Mutual funds are becoming increasingly popular among Nigerian investors. As a newbie to investment, I am quite sure you might have come across the term Mutual Funds and you are wondering what it means and asking the question, What’s in it for me?
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Not to worry, whether you are a beginner who wants to know why mutual funds can help you achieve your investment goals, or you are a pro investor and you need a reminder of why mutual funds may be best-suited for your financial goals, this article discusses the top 3 benefits of mutual funds and why you need to include them in your primary investment portfolio in order to achieve your investment goals.
Grab a seat and keep a writing pad handy.
What are Mutual Funds?
In the simplest terms, mutual funds are professionally managed investment plans or funds and are handled by an asset management company, AMCs. Investors are enabled to invest in a diverse assortment of assets that are managed by proficient and experienced fund managers.
This basically means that the fund managers pool money from different investors to purchase mostly broad and diversified pool of investments ranging from bonds, agricultural produce, to other financial securities. Most mutual funds usually outline the type of investments they hope to invest your money in. This can be found in the investment catalogue. The profit derived from the diversified pool of investments are shared to investors in the funds annually, semi-annually or as stipulated in the fund scheme or plan.
Top 3 Benefits of Investing in Mutual Funds.
The benefits of mutual funds include risk mitigation as a result of a diversified portfolio, opportunity for low-income earners to invest, flexibility of investment plan, professional management etc. Let us now take a look at these 3 top benefits of investing in mutual funds.
1. Simplicity – Mutual funds are easy to understand. Although there are a handful of things you need to know before investing in mutual funds SEE A guide to how mutual funds work in Nigeria. Mutual funds is quite easy to understand when compared to other investment products. Because they are usually managed by experienced fund managers, you do not need to bother with the intricate details of investments in stocks or bonds or other financial products as indicated in your investment catalogue.
You might consider investing in our mutual funds.
So unless you have expertise in picking stocks and are able to devote a lot of time attending annual general meetings, dial in to results conference calls, reading and analysing balance sheets and income statements, you are better-off investing in mutual funds.
2. Low management costs – Mutual funds can cost less to manage than other portfolio types. An individual stock portfolio for example can cost more in terms of transaction costs, annual fees paid to a brokerage firm, and the cost for research tools or investment advice. Our mutual funds for example, only requires your investment capital which could be as little as 20,000NGN where you get a 15% quarterly ROI. No management fee, no hidden charges. Learn more
3. Accessibility – Mutual funds are easy to buy. They are offered at investment firms, brokerage firms, Asset management companies online, mutual fund companies, investment department of banks, and insurance companies. Even beginning investors can easily open an account from the comfort of their living room. Sign up today.
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